Free Objective test Questions on Economics
Multiple choice questions on indian economics
Multiple choice questions on indian economics
1. The sequencing
process of Schumpeter model of development is
(A) Swarm like
Clusters, Innovation, Bank credit, Breaking circular flow
(B) Breaking
circular flow,Innovation, Bank credit, Swarm like Clusters
(C)
Innovation, Bank credit, Breaking circular flow, Swarm like Clusters
(D) Bank
credit, Innovation, Swarm like Clusters, Breaking circular flow
Ans :B
2. Arrange the
following in chronological order :
I. CES
production function.
II. Cobb-Douglas
production function
III. Tronslog
production function
IV. The law of
variable proportions
Codes :
(A) III, I,
IV, II
(B) I, IV, II,
III
(C) IV, II, I,
III
(D) II, III,
I, IV
Ans :C
3. Assertion (A)
: Investment
has also a supply effect.
Reason (R) : Because it
raises capacity to produce.
Codes :
(A) Both (A)
and (R) are correct and (R) is not the correct explanation
of (A).
(B) Both (A)
and (R) are correct and (R) is the correct explanation of
(A).
(C) (A) is
correct, but (R) is not correct.
(D) (A) is not
correct, but (R) is correct.
Ans :B
4. Assertion (A)
: K/L
ratio will adjust through time in the direction of
equilibrium
ratio.
Reason (R) : Because the
technical coefficient of production are variable.
Codes :
(A) Both (A)
and (R) are correct and (R) is not the correct explanation
of (A).
(B) Both (A)
and (R) are correct and (R) is the correct explanation of
(A).
(C) (A) is
correct, but (R) is incorrect.
(D) (A) is
incorrect, but (R) is correct.
Ans :B
5. Assertion (A)
: Effective
demand can be increased by more equitable
distribution
of wealth.
Reason (R) : Thirty or
forty entities with income averaging between 1 lakh and 5 lakhs would create
much more effective demand than a single entity having
income of 10
lakhs a year.
Codes :
(A) Both (A)
and (R) are correct and(R) is not the correct explanation
of (A).
(B) Both (A)
and (R) are correct and (R) is the correct explanation of
(A).
(C) (A) is
correct, but (R) is incorrect.
(D) (A) is
incorrect, but (R) is correct.
Ans :B
6. The Planning
Commission of India has recently made announcement regarding Poverty Line :
I. Rs. 42 per capita per day in urban area
II. Rs. 26 per capita
per day in rural area
III. Rs. 32 per capita
per day in urban area
IV. Rs.32 per capita per day in rural area
Codes :
(A) I and II
are correct.
(B) I and III
are correct.
(C) II and III
are correct.
(D) III and IV
are correct.
Ans :C
7. In Keynesian
system speculative demand for money arises because of
I. Uncertainty
of future interest rates
II. Unexpected
expenditures
III. To bridge
the gap between income
and eventual
expenditure
IV.
Relationship between changes in
the interest
rates and bond prices
Codes :
(A) I and III
are correct.
(B) I and IV
are correct.
(C) II and III
are correct.
(D) III and IV
are correct.
Ans :B
8. The doctrine
of unbalanced growth was propounded by
I. Hirschman
II. Robert
Solow
III. Singer
IV. Ragnar
Nurkse
Codes :
(A) I and II
are correct.
(B) II and III
are correct.
(C) III and IV
are correct.
(D) I and III
are correct.
Ans :D
9. Fiscal policy
relates to the Government decision in respect of
I. Taxation
II. Government
spending
III.
Government borrowing
IV. Public
Debt
Codes :
(A) III and IV
are correct.
(B) II, III
and IV are correct.
(C) I and II
are correct.
(D) All the
above are correct.
Ans :D
10. Improvement in
the BOP deficit may be effected through
I. Import
control
II. Export
promotion
III. Foreign
exchange control
IV.
Devaluation
Codes :
(A) I and II
are correct.
(B) I, II, III
and IV are correct.
(C) II and III
are correct.
(D) I, II and
III are correct.
Ans :B
11. For an
inferior goods, income consumption curve and Engles curves
are
(A) Positively
sloped
(B) Negatively
sloped
(C) Are the
same
(D) Income
consumption curve is positively sloped and the Engles curve is negatively
sloped
Ans :B
12. If the demand
for money is perfectly interest inelastic, the LM schedule will
be
(A) Upward
sloping
(B) Downward
sloping
(C) Horizontal
line
(D) Vertical
line
Ans :D
13. In calculating
the buoyancy of a tax,we consider
(A) Only
discretionary changes
(B) Only
automatic changes
(C) Both (A)
and (B)
(D) Neither
(A) nor (B)
Ans :C
14. Comparative
cost advantage in Ricardo’s international trade theory
arises due to
(A) Labour
cost differences
(B)
Differences in factor endowment
(C) Factor
abundance defined in terms of factor prices
(D) All of the
above
Ans :A
15. A point of
‘Kink’ in the kinked demand curve indicates
I. Price rigidity
II. Quantity
rigidity
III. Price
flexibility
IV. Quantity
flexibility
Codes :
(A) I and II
are correct.
(B) II and III
are correct.
(C) III and IV
are correct.
(D) I and IV
are correct.
Ans :A
16. HDI is
entrusted with reference to :
I. Life
expectancy at birth
II. Real GDP/per capita
III. Infant
mortality
IV. Morbidity
Codes :
(A) I and II
are correct.
(B) II and III
are correct.
(C) III and IV
are correct.
(D) All the
above
Ans :D
17. According to
Milton Friedman Theory of permanent component of
consumption-expenditure
depends on
I. Transitory
income alone
II. Transitory
and permanent income
III. Permanent
income alone
IV. Windfall
gains
Codes :
(A) I and II
are correct.
(B) I and III
are correct.
(C) II and IV
are correct.
(D) Only III
is correct.
Ans :D
18. Assertion
(A) : According to the Life Cycle Theory of consumption, an
individual
level of consumption depends not just on current income but also on long run
expected earnings.
Reason (R) : Individuals
are assumed to plan a pattern of expenditure
based on
expected earnings over life time.
Codes :
(A) (A) is
true, but (R) is false.
(B) Both (A)
and (R) are false.
(C) (A) is not
correct, but (R) is correct.
(D) Both (A)
and (R) are correct and
(R) is correct
explanation of (A).
Ans :D
19. Assertion
(A) : Stationary state is the end of the process of capital
formation.
Reason (R) : Scarcity of
natural resources as also capital leads the
economy to the
stationary state.
Codes :
(A) Both (A)
and (R) are correct and (R) is not the correct explanation
of (A).
(B) Both (A)
and (R) are correct and (R) is the correct explanation of
(A).
(C) (A) is
correct, but (R) is not correct.
(D) (A) is not
correct, but (R) is correct.
Ans :B
20. Arrange the
following theories in the
chronological
order :
I. Restatement
of Quantity Theory
II. Income
Theory
III. Quantity
Theory
IV. Cash
Balance Approach
Select the
correct answer from the
given codes :
Codes :
(A) I, II, IV,
III
(B) III, I,
II, IV
(C) IV, III,
I, II
(D) III, IV,
II, I
Ans :D
